Correlation Between Walt Disney and PT Global

Can any of the company-specific risk be diversified away by investing in both Walt Disney and PT Global at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Walt Disney and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Walt Disney and PT Global Mediacom, you can compare the effects of market volatilities on Walt Disney and PT Global and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Walt Disney with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walt Disney and PT Global.

Diversification Opportunities for Walt Disney and PT Global

-0.61

Correlation Coefficient

Walt Disney  PT Global

Excellent diversification

The 3 months correlation between Walt and 06L is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Walt Disney and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and Walt Disney is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Walt Disney are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Walt Disney i.e., Walt Disney and PT Global go up and down completely randomly.

Pair Corralation between Walt Disney and PT Global

Assuming the 90 days trading horizon The Walt Disney is expected to generate 0.63 times more return on investment than PT Global. However, The Walt Disney is 1.58 times less risky than PT Global. It trades about 0.33 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.03 per unit of risk. If you would invest  8,063  in The Walt Disney on September 12, 2024 and sell it today you would earn a total of  2,823  from holding The Walt Disney or generate 35.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Walt Disney  vs.  PT Global Mediacom

Walt Disney

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Walt Disney are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Walt Disney unveiled solid returns over the last few months and may actually be approaching a breakup point.

PT Global Mediacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PT Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Walt Disney and PT Global

The main advantage of trading using opposite Walt Disney and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walt Disney position performs unexpectedly, PT Global can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in PT Global will offset losses from the drop in PT Global's long position.

The idea behind The Walt Disney and PT Global Mediacom pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.